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In the gripping game of thrones of Philippine politics, voters have delivered former Philippine President Rodrigo Duterte a sweeping mayoral victory in his hometown stronghold of Davao – predictable for a family that has held the job for more than 20 years.

But this latest landslide win creates a predicament for the Philippines, as the mayor-elect is thousands of miles away behind bars awaiting trial on charges of crimes against humanity.

Prosecutors at the International Criminal Court (ICC) in The Hague accuse the 80-year-old political patriarch of carrying out a brutal war on drugs that killed possibly thousands of people, including many innocents and bystanders. Though he openly boasted about the crackdown, Duterte has long denied accusations of human rights abuses and has repeatedly said he will not kowtow to a foreign court.

His next hearing is in September, but before then experts say he faces a new, complicated legal battle between the ICC and Philippine jurisdiction over whether he will be allowed to take the oath of office.

Duterte can potentially be sworn in by proxy or in absentia – possibly by a video call, but only if The Hague-based court allows it, experts say.

If he’s allowed to assume the role, questions will be asked about how he could administer the southern city from a detention center in another time zone, where he has access to a computer and phone calls to family, but no internet.

Under Philippine law, day-to-day duties could fall to his youngest son, Sebastian Duterte, who was elected as vice mayor of Davao City.

If the senior Duterte isn’t allowed to take the oath, experts say the role of mayor could fall to election runner-up Karlo Nograles, of the Nograles political dynasty, longtime Duterte rivals in Davao, where both families tussle for influence.

Ramon Beleno, a political analyst and former professor from Ateneo de Davao University, said handing the job to Nograles could trigger a separate legal challenge from the Dutertes.

Duterte’s ‘last hurrah’?

Duterte remains a powerful yet divisive figure in the Philippines. In Davao City, where he served as mayor for over two decades before becoming president in 2016, fervent supporters credit his iron grip over the city with bolstering law and order.

Duterte’s lawyer, Nicholas Kaufman, was quoted by Philippine news outlet ABS-CBN as saying the “overwhelming” support for Duterte in the 2025 midterm elections showed the public’s “total rejection” of the national government’s “attempt to stamp out” the former president’s legacy.

Beleno said voters saw this election as Duterte’s “last hurrah” and cast their ballot as a final tribute to the aging former strongman leader. Duterte’s arrest had only galvanized voters, he said.

Support for Duterte extended to his family, who re-emerged in the vote with sweeping control of their political stronghold.

All five Duterte family members who ran in this election won by a landslide. Duterte’s son Paolo was re-elected to congress and two of Paolo’s sons also won public office: Omar won as congressman for Davao City’s second district and Rodrigo II, who goes by the nickname “Rigo,” was elected as first district councilor.

Sebastian Duterte, the vice mayor-elect – who could be mayor in his father’s absence – is not as outspoken as the elder Duterte and a lot of political responsibilities are already weighing against him at home, Beleno said.

Is he allowed to be mayor?

The main legal hurdle Duterte faces, despite his landslide mayoral win, is whether he would be allowed to swear the oath during his enforced absence.

All elected public officials are supposed to take their oath within 30 days of their supposed assumption of office on July 1, according to Joel Butuyan, an ICC-accredited lawyer and president of human rights NGO CenterLaw.

Unable to be sworn in at home, Duterte would need to take the oath in the presence of a Philippine ambassador or consul in The Hague, which seems unlikely, Butuyan said.

“I don’t think he’s going to be allowed to get out just to take office because it’s not in the enumerated rights of an accused (person) in the ICC,” he said.

If the ICC grants Duterte permission, the oath will be recognized in the Philippines, but he “will not be able to perform his functions because he’s out of the country and he’s in detention,” Butuyan said.

“It’s not ideal at all,” Butuyan added, of the election result. “It does not serve the interests of the people of Davao that they voted for someone who will not be able to perform his functions as a city mayor.”

The mayor is the face of the city, with administrative tasks such as attending meetings and functions, signing documents and authorizing payrolls – all difficult to do effectively if Duterte is sitting halfway across the world, said Beleno, the political analyst.

Even before the final votes were cast, Duterte’s daughter, Vice President Sara Duterte-Carpio, said that her father’s ICC lawyer and Philippine legal team were discussing how he can take the oath.

“The ICC lawyer said that once we get proclamation papers, we’ll discuss again how former President Rodrigo Duterte can take the oath,” she said.

In a court filing to the ICC earlier this month, Kaufman said there is no legal basis for the case against Duterte because the Philippines is no longer a member of the Rome Statute.

Duterte withdrew the Philippines from the ICC, but under the court’s withdrawal mechanism, it keeps jurisdiction over crimes committed during the membership period of a state – in this case, between 2016 and 2019, when the country’s pullout became official.

A political stalemate

The closely watched midterm election was considered a proxy battle between President Ferdinand Marcos Jr. and Vice President Duterte-Carpio as ties disintegrate between the former allies turned enemies.

The vice president is facing impeachment complaints in the House of Representatives amid allegations of corruption, which she denies. A two-thirds vote in the Senate is required to convict her, remove her from public office, and ban her from seeking any public post.

To stay in office, Duterte-Carpio needs nine of 24 senators to vote for her acquittal. And neither the Marcoses nor the Dutertes dominate the Senate after the May 2025 vote.

The race yielded a three-way stalemate between Marcos-endorsed candidates, Duterte-allied politicians, and liberal-leaning figures, said Maria Ela Atienza, a political science professor at the University of the Philippines.

“The vice president has more breathing room now … but she should also be careful with how the public perceives her,” Atienza said. “Her popularity ratings have recovered a bit … but we have seen she can make mistakes that can affect the sentiments of the people.”

In reality, the Filipino public is also becoming impatient with the drama in high places, Atienza said. “They’re getting tired of having the Dutertes always fighting with the Marcoses,” she said.

For now, political bickering is in gridlock. But Rodrigo Duterte’s stronghold still stands and his supporters long for the day he is officially declared mayor and comes back to serve his home country.

This post appeared first on cnn.com

Austria won its third Eurovision Song Contest after a glittering grand final in neighboring Switzerland, with singer JJ earning the continent’s votes for the operatic pop anthem “Wasted Love.”

The song, which showcases the classically trained Austrian-Filipino singer’s remarkable vocals and was staged in a dramatic style that evoked a shipwreck, dazzled the crowd in Basel and saw Austria triumph for the first time since Conchita Wurst’s victory in 2014.

Israel came second in the leaderboard, with Yuval Raphael – a survivor of Hamas’ October 7 attacks – winning support for her performance of “New Day Will Rise.” Estonia was placed third, while San Marino earned the last-place spot.

“I had a pretty tough year, and I wanted to write about my personal experience with wasted, unreciprocated love,” he said, adding that if he won Saturday’s final, he would “probably break down, start crying and then call my family.”

The Eurovision grand final is a defining event on the LGBTQ+ calendar and attracts interest across the continent, showcasing some of Europe’s most talented, eccentric and varied performers.

Taking to the stage on Saturday were a Latvian ethno-pop six-piece, whose bewitching track melded a folk chant with fairytale imagery; a Ukrainian glam rock-inspired group; a gimmicky Estonian artist who caricatured Italian coffee culture; and an Albanian double act whose haunting track “Zjerm” became a fan favorite.

A rumored appearance by Celine Dion, who won Eurovision for Switzerland in 1988 and who, along with ABBA, is the contest’s most celebrated alumni, failed to materialize.

Though organizers insist Eurovision is an apolitical event, the contest has long been embroiled in the continent’s tensions. Russia and Belarus were banned following Moscow’s invasion of Ukraine, and the participation of Israel has been opposed by segments of the fanbase due to the country’s ongoing war in Gaza.

The Israeli contestant Raphael — who was attending the Nova music festival when Hamas launched its cross-border attacks in October 2023 — sang to an arena where Palestinian flags were flying, following a rule change by the European Broadcasting Union (EBU).

This post appeared first on cnn.com

As a missionary and bishop in Peru, the future Pope Leo came face-to-face with one of the most serious and far-reaching scandals in the church in Latin America.

For years, there were allegations of abuse within the hugely influential Catholic society Sodalitium Christianae Vitae (SCV), which had deep ties to Peru’s powerful and wealthy.

The scandal came to a head in 2015, the year after Leo, then known as Robert Prevost, was appointed bishop in the northern city of Chiclayo. A book written by one of the victims, Pedro Salinas, with journalist Paola Ugaz, “Half Monks, Half Soldiers,” described alleged beatings, humiliation and sexual assault in stark detail from 30 anonymous victims that enflamed the country.

A secret brotherhood

When Oscar Osterling formally joined SCV in 1992, he was instructed not to tell his parents about his loyalty oath – a secrecy that appealed to the then-teenager. He would go on to spend more than two decades with SCV, only breaking out in his mid-thirties as the first allegations began to surface.

Founded in 1971 in Peru as a lay group, the Sodalitium was politically driven as a fight back against the rise of liberation theology in Latin America, a radical movement which began in the 1960s and focused on supporting the poor. The society controlled several communities and ran religious schools in the southern part of the country, its members and students mostly drawn from the country’s elite.

At one point, SCV had 20,000 members across South America and parts of the United States – and went on to develop strong ties with Denver and Colorado, including links with conservative Catholic media.

But hearing the others’ accounts, Osterling says he realized the strangeness of his own experience; he alleges that Figari would film him and other young converts standing in their underpants in the middle of the night during a spiritual retreat.

“In my case it did not escalate to a full sexual assault,” he says. He now believes he and his cohort were being groomed.

While dozens of young Peruvians have alleged they were victimized or bullied by Figari and other senior members of SVC, the topic remains taboo in ultra-Catholic Peru, and only a few have chosen to make details of their allegations public.

Prevost, who lived in Peru as a missionary in the 1980s and the 1990s, would have heard about these accounts while serving as Bishop of Chiclayo starting in 2014, especially following the publication of Ugaz and Salinas’ bombshell book.

Ugaz and Salinas also accused José Antonio Eguren, an archbishop in the coastal diocese of Piura – where Prevost worked as a young priest and which neighbors his diocese of Chiclayo – of protecting the SCV despite knowing about alleged abuses within it.

Eguren fought back with a defamation lawsuit alleging this was untrue and harmed his honor and reputation, though he later dropped the case.

According to Ugaz, who has faced a long campaign of legal actions and death threats around her reporting on the Sodalitium case, she received a message of solidarity during this time from Prevost and two other bishops.

A shocking report

In 2017, a probe ordered by SCV revealed stunning allegations. The group, which had already begun a series of internal disciplinary actions, found that Figari sodomized his recruits and forced them to fondle him and one another. He liked to watch them “experience pain, discomfort and fear,” and humiliated them in front of others to enhance his control over them, the report alleged.

The next year, more than a dozen alleged victims of the SCV from across Peru, Brazil, Colombia and Costa Rica, held a meeting with five high ranking prelates at the Peruvian Episcopal Conference in Lima. Prevost was one of the meeting’s organizers; according to Ugaz, he acted as a “bridge” between the victims and the SCV and helped secure financial settlements.

When the meeting finally took place, Orbegozo recalls, “Prevost recognized me immediately. ‘You are the guy from the email!’ he told me.” “He wanted to know everything about our correspondence …and showed real empathy,” Orbegozo said.

Osterling and Ugaz recall that the bishops they met agreed to write a letter to the Vatican, pushing to investigate the alleged crimes and asking for the personal involvement of then-Pope Francis. But higher church officials declined to move the case forward.

Ugaz, who first met Prevost in 2018 and remained in contact with him, said the stalled outcome of the meeting caused Prevost “great frustration” although she added “his character is not one to burn down the house. He accepted what had happened, made his frustration clear.”

Though that meeting initially seemed to lead to little, Orbegozo and Osterling believe it was the first crack in a wall destined to crumble.

“(Prevost) knew — he knew about many things — but he couldn’t act because he had people above him. So much so, that as soon as he could, he did — when they made him prefect,” says Osterling.

A cascade of action

Everything seemed to accelerate in early 2023 after Prevost was named prefect of the influential Dicastery of Bishops – a role that suddenly catapulted him into a much more powerful position than the archbishop next door in Piura.

The job gave him a crucial role in the appointments and oversight of bishops, holding regular meetings with fellow cardinals and Pope Francis to discuss episcopal nominations.

It’s hard to say exactly what happened in the halls of the Vatican after Prevost moved to Rome. But the next year, two top investigators from the Vatican were finally sent to Lima to establish what had happened within SCV – a probe that led to the expulsion of 14 members of the society, including Figari.

Archbishop Eguren also resigned in April 2024 at the age of 67 – several years before the normal retirement age of 75 – without specifying the reasons.

Eguren has denied Prevost’s involvement in his resignation, emphasizing that he offered his resignation directly to Pope Francis. After stepping down, the archbishop also said in a statement that he rejected Ugaz and Salinas’ allegations, and had “sought to fulfil the mission entrusted to me with justice, honesty, and fidelity to the teachings of the Church, with special concern for the well-being of the poorest and most needy.”

Another expelled member was Alejandro Bermúdez, founder of the Denver-based Catholic News Agency, who was found by the Vatican investigation to have committed “abuse in the exercise of the apostolate of journalism.”

Bermudez, known for a combative style on social media, has countered that he was kicked out for simply “telling the truth.” More recently, he worked as a contractor with “Catholic Vote,” an organization which sought to bolster support for US President Donald Trump in the 2024 election. (The group’s president Brian Burch is President Trump’s pick to be the next US Ambassador to the Holy See.)

The Sodalitium still retained powerful supporters. Following the news of the expulsions, the Archdiocese of Denver said it was “shocked and saddened” while an adviser to a former Archbishop of Denver wrote that “something is deeply wrong” with the “Rome’s latest treatment of the SCV (Sodalitium).”

Nevertheless, in early 2025, then-Pope Francis went even further, taking the very rare step of suppressing the society entirely.

The move was formally decreed on April 14 – just a week before Francis died. Afterwards, the SCV released a statement asking “forgiveness from the entire Church and society for the pain caused” and “forgiveness for the mistreatment and abuse committed within our community.”

Prevost has been accused of mishandling abuse allegations in two other cases, in Chicago and in Chiclayo, Peru. But in the case of the SCV, Ugaz says she is certain that Prevost “took action” to help ensure the Sodalitium was dissolved. She and Salinas met with him in the Vatican in October 2024, and she says he arranged their meeting with Pope Francis two months later.

After years of fighting to be heard, Osterling says he never lost his Catholic faith – but that Francis’s eventual crackdown reinvigorated it.

As Francis’ successor, Pope Leo seems to have left little doubt about his stance on the end of SCV. A few days after his election, Leo was photographed greeting Ugaz with a broad smile, as she handed him a box of chocolates and a Peruvian scarf from the country he called home for years.

This post appeared first on cnn.com

Leo XIV, the first ever American pope, will be formally inaugurated as the 267th pontiff Sunday during a special Mass in St. Peter’s Square attended by world leaders, royalty, and thousands of believers.

The May 18 service will be rich in symbolism and include the formal bestowing on Leo of the symbols of office including the pallium – a lamb’s wool vestment symbolizing his pastoral care for the church and role as shepherd to his flock – and the fisherman’s ring, which symbolizes the Pope’s authority as the successor of St. Peter, a fisherman by trade and who Catholics hold to be the first pope.

Among those expected to attend Sunday’s two-hour long liturgy include US Vice-President JD Vance, US Secretary of State Marco Rubio, Ukrainian President Volodymyr Zelensky, and the President of Peru, Dina Boluarte, the leader of the country where Pope Leo served as both a missionary and a bishop for several decades. Countries from across the globe will be represented, with the Vatican hosting delegates from more than 150 nations.

The 69-year-old Chicago-born pontiff is expected to greet delegations from different countries after his inauguration Sunday, a Vatican spokesman said.

Although Leo was elected as pope on May 8, the official beginning of his papacy begins on May 18, with his first general audience with the public scheduled for May 21.

In his first Mass as pontiff on May 9, Leo called on the clergy to show humility, has made repeated appeals for peace and explained his choice of name. Later in the week, he used his first Vatican address since his election to call for peace in Ukraine and Gaza, saying “Never again war!”

The first American pope, who is an avid tennis player, has also met with journalists and men’s tennis number one seed, Jannik Sinner.

Symbols of office

On Sunday morning , Pope Leo will use the popemobile for the first time and greet people in St Peter’s Square before heading inside the basilica for the Mass.

He will be joined by leaders of Eastern Orthodox churches for the first part of the service as he descends to pray at the tomb of St.Peter. The pallium, the ring and a book of the gospels will then be taken by two members of the clergy towards the altar in the square.

The scripture readings at the Mass will largely focus on the figure of St. Peter and the central passage from John’s Gospel, a text seen as foundational to the pope’s ministry as St. Peter’s successor.

Following this reading, three cardinals will then present the pope with the symbols of office.

Cardinal Dominique Mamberti, who announced the news that Leo had been elected, will place the pallium over the new pontiff. Cardinal Fridolin Ambongo Besungu, of the Democratic Republic of the Congo, will say a special prayer. Cardinal Luis Antonio Tagle of the Philippines will present Leo with the signet “ring of the fisherman,” which was traditionally used to seal official documents but is now ceremonial.

The Vatican has released details of the ring, which has an image of St. Peter on the outside band, with “Leo XIV” and the pope’s coat of arms engraved on the inside.

All bishops wear rings to show their bond to the local church they lead and the ring of the Pope, as Bishop of Rome, symbolises his “betrothal” to the entire church.

After receiving the symbols of office, representatives of ordinary Catholics from across the world will show their “obedience” to the pope, something that in the past was done by cardinals. The decision to include non-cardinals in this part of the service shows the pope’s commitment to a church which seeks to deepen the involvement of Catholics who are not part of the hierarchy. The inclusion of ordinary Catholics in the ceremony is also a nod to Leo’s intent to continue reforms started by his predecessor, Pope Francis.

During the Mass, Pope Leo will also give a homily, where he will likely set out some of the key themes of his pontificate, something he would have spent time considering carefully.

After the Mass ends, the pope will lead the Regina Caeli, or “Queen of Heaven” prayer before meeting the international delegations inside the basilica.

Papal inauguration ceremonies have changed over the years. For centuries it also involved a “coronation,” which included placing the papal tiara on the new pope’s head. The last papal “coronation” was of Paul VI in 1963. He however, decided to sell the tiara and give the proceeds to charity. Catholics in the US bought that tiara, which is now on display at the Basilica of the National Shrine of the Immaculate Conception in Washington, D.C.

This post appeared first on cnn.com

The Justice Department isn’t planning to prosecute Boeing in a case tied to two crashes of the aerospace giant’s 737 Max, a person familiar with the matter said, a tentative agreement that would allow the plane-maker to avoid a guilty plea.

Boeing agreed to plead guilty in the case last summer in a deal with the Justice Department after the Biden administration found earlier that year that the company violated a 2021 agreement tied to the crashes. A judge rejected that plea deal last year, citing concerns about diversity, equity and inclusion, and opened the possibility that Boeing could face trial.

The fraud charge stems from Boeing’s development of the 737 Max. The U.S. had accused Boeing of misleading regulators about its inclusion of a flight-control system on the Max that was later implicated in the two crashes.

A final, non-prosecution agreement hasn’t been reached yet, the person said. The Justice Department and Boeing didn’t immediately comment.

Under the new agreement, Boeing could pay family members of victims of the two Max crashes. In total, the two crashes of the best-selling Boeing jet killed all 346 people on board the planes.

The new tentative agreement, which was reported earlier on Friday by Reuters, would mean Boeing wouldn’t be labeled a felon. That label could have come with restrictions on defense contractor work.

Boeing is the country’s biggest exporter and, in addition to making commercial jetliners, it’s a major defense contractor. The Trump administration recently awarded the company a multibillion-dollar contract to build a next-generation fighter jet.

This post appeared first on NBC NEWS

The S&P 500 ($SPX) just staged one of the sharpest rebounds we’ve seen in years. After tumbling into deeply oversold territory earlier this year, the index has completely flipped the script—short-term, medium-term, and even long-term indicators are now pointing in a new direction.

One longer-term indicator that hit an extreme low in early April was the 14-week relative strength index (RSI), which dropped to 27. That’s among the lowest levels since the 2008 financial crisis.

The obvious takeaway: it was a great time to buy, even in cases where the low RSI didn’t mark the low. Everyone who pounded the table a few weeks ago has been proven right, even if the rebound was faster and stronger than most could’ve predicted. So, what happens next?

Don’t Expect a Straight Line Up

The long-term picture looks promising, but markets rarely move in a straight line. Even though the market was higher months and years after these deeply oversold readings, the path wasn’t a straight shot to new highs (even if long-term log charts sometimes make it look that way).

The chart below shows the lowest weekly RSI readings in the S&P 500 since 2008.

FIGURE 1. THE LOWEST WEEKLY RSI READING SIN THE S&P 500 SINCE 2008.

Almost every time, there was a pause, often more than one. Some were sharp, others more prolonged. The first real test typically came when RSI bounced back to the 50-zone (the mid-point of its range). Each of these moments is highlighted in yellow in the chart below.

FIGURE 2. AFTER DEEPLY OVERSOLD RSI READINGS, THERE WAS OFTEN A PAUSE IN THE INDEX.

As shown, this often marked the initial digestion phase after the face-ripping rally off the lows. Eventually, the SPX climbed back to a weekly overbought condition, but not right away. This pattern was clearest in 2011, 2015–16, and 2022. The depressed weekly RSI showed that things were getting washed out, but volatility persisted before a lasting uptrend took hold.

Indeed, the current snapback is one of the quickest and most powerful turnarounds in decades, but this pace is also unsustainable. A slowdown is inevitable.

So how does the market handle the next round of profit-taking? By continuing to make higher lows – and converting those into additional bullish patterns.

XLK Makes A Comeback

The market comeback has been led by large-cap growth; that much is clear. The Technology Select Sector SPDR ETF (XLK) has roared back nearly 30% in just six weeks. That’s a massive move in a short period, and far larger than any failed bear market rally seen in 2022. The best six-week rally back then came in the summer and topped out at 17%.

The last time we saw a six-week gain of 20%+ was the period following the COVID-19 low in spring 2020. As we know, that snapback continued, with XLK overtaking its pre-crash highs and ultimately rallying 160% into the early 2022 peak.

This isn’t a prediction, but we shouldn’t ignore it either. Why? Because before 2020, the last such move happened in April 2009, right after the ultimate low of the 2008 financial crisis.

FIGURE 3. WEEKLY CHART OF XLK.

Industrials are Building Strength Too

The Industrial Select Sector SPDR ETF (XLI) and XLK are the first sector ETFs to register overbought 14-day RSI readings. While that suggests a short-term pause could be near, it wouldn’t be a negative. As the weekly chart shows, a pullback could help complete a large bullish formation.

Once again, bouts of intense volatility eventually can lead to the biggest bullish chart formations. Let’s keep XLI on our radar screens.

FIGURE 4. WEEKLY CHART OF XLI.

Even Solar Stocks Are Waking Up

The Invesco Solar ETF (TAN), which has been stuck in a brutal downtrend for years, just rocketed higher by 40%, using intra-day highs and lows. That rally has produced the first overbought reading since late May 2024, which, notably, lasted only a day before momentum faded.

Yesterday, TAN tagged its 200-day moving average, prompting a round of profit-taking. This sets up a critical test for TAN, which has consistently failed at resistance or after short-term pops. Selling strength in TAN has been a highly effective strategy for quite some time.

FIGURE 5: DAILY CHART OF TAN.

The weekly chart clearly shows this pattern playing out since TAN topped in early 2021. Like anything else, TAN could eventually turn the corner—but to do so, it would need to form a legitimate higher low from here.

For now, the downtrend deserves respect. Chasing this move is not advised. Selling strength remains the recommended approach—until proven otherwise.

FIGURE 6. WEEKLY CHART OF TAN.

The Bottom Line

Yes, the market’s comeback has been fast and fierce. But fast moves don’t necessarily mean a straight path higher. Expect slowdowns and pullbacks, watch for bullish setups, and don’t chase runaway rallies. There’s opportunity out there, but it’s all about timing and discipline.


For those of you who are a bit more steeped in technical analysis, you’ve likely heard of Dow Theory. A set of principles developed from Charles Dow, a journalist/analyst who founded what’s now the Wall Street Journal back in the late 19th century, Dow’s insight was foundational to modern technical analysis.

Here’s a question: How can we view today’s market using Dow Theory’s six core tenets?

The market seems to be turning around, especially after the recent 90-day pause in U.S.-China tariffs. What insights might Dow Theory give us about the current reversal? Let’s dive in.

#1: The Market Discounts All Known Information

Here’s the thing: When tariffs are used as a nimble and adjustable strategy for hardball negotiations, how can anyone possibly price in the data? Too many unknowns are hiding behind the cards played for the market to discount any data driven by fundamentals and geopolitics.

So, this tenet can probably be skipped for now.

#2: The Market Has Three Movements

We’d have to modify this slightly, as markets, several of which are globally accessible 24/5 via futures and digital platforms, have significantly altered the market dynamics since Dow’s time.

Still, his notion of primary and secondary trends is as relevant today as it was then. But increased market access and trading volume have created tertiary or micro-trends on a scale above the Dow’s third movement of daily fluctuations.

Take a look at this 15-year monthly chart of the S&P 500 Large Cap Index ($SPX).

FIGURE 1. MONTHLY CHART OF THE S&P 500. The primary trend is up and is reversing from a deep secondary correction.

According to this tenet, one way to interpret this is that the primary trend is bullish and the corrections and bear markets, highlighted in yellow, are all secondary trends, as dramatic as they were on a smaller time scale.

Key insight: SPX’s primary trend is bullish, but the question is whether it has pulled out of its bearish secondary trend. It’s now trading above its 10-month simple moving average (SMA), which is roughly equivalent to a 200-day SMA, but whether it can hold is something to monitor.

#3: Primary Trends Have Three Phases

Is the broader market in an accumulation phase, where professional investors buy undervalued assets, a public participation phase, where retail investors are jumping in, or a distribution phase, where smart money sells to the euphoric retail crowd?

Take a look at this weekly chart.

FIGURE 2. WEEKLY CHART OF THE S&P 500. These indicators are based on surveys of retail and professional investor sentiment.

Two ways to gauge retail and professional sentiment and participation are by analyzing the American Association of Individual Investors (AAII) and National Association of Active Investment Managers (NAAIM) surveys (respectively). Look at the current week (blue dotted line) and note how the AAII Bull-Bear indicator representing retail sentiment is still net bearish while the NAAIM indicator shows accumulation as the S&P 500 gaps above the 40-day SMA (equivalent to its 200-day counterpart).

In the weeks leading up to the current week, as the NAAIM levels increased while the AAII remained net bearish, the contrast between the two arguably signals the strong likelihood that the broader market is in the accumulation phase. But remain cautious as, with the first tenet on known information, any new information or change in global trade policy can disrupt this picture, sending the $SPX back below the 40-week.

#4: The Averages Must Confirm Each Other

Back in his day, Charles Dow was referring to the Dow Jones Industrial Average ($INDU) and the Dow Jones Transportation Average ($TRAN). Today, most investors look at the $INDU alongside $SPX and the Nasdaq Composite ($COMPQ).

FIGURE 3. CHART OF THE BIG THREE U.S. MARKET INDICES. Visually, the charts look similar, but a closer look is warranted to see the differences in detail.

While the differences in price action are nuanced, a quick scan of all three on the StockCharts Market Summary page will tell you that all three indexes are more or less on even footing. But in the interest of saving space and not zooming in on each chart,at the time of writing, only the $SPX and $COMPQ are trading above their 200-day SMA; $INDU is just right below it.

Another way to measure this is by comparing market breadth, aka participation.

FIGURE 4. MARKET SUMMARY OF BREADTH AND BULLISH PERCENT INDEX. These indicators focus on market participation, something that price alone can’t show.

The window on the left tells you the percentage of stocks in each index trading above their 20-, 50-, 100-, and 200-day moving averages. Given the importance of the 200-day SMA, we’ll focus on that. While this window doesn’t show $INDU, you can see that over 54% of $SPX stocks and only 33% of $COMPQ stocks are trading above their 200-day SMA. However, the Nasdaq 100 Index ($NDX), a more tech-concentrated subgroup of $COMPQ, has the most bullish reading, with 64% of its stocks trading above this key level.

Switching over to the Bullish Percent Index (BPI) window on the right, the $SPX and $INDU have the strongest bullish participation with 74% and 83% of their stocks, respectively, signaling Point & Figure Buy Signals. The $COMPQ, at only 50%, is lagging the two (not the case with $NDX, however, which is also very bullish).

So, do the averages confirm each other? More or less, yes, with $COMPQ as the laggard. This may indicate a bullish turnaround in the secondary trend, but the secondary trend is also extremely vulnerable to sudden shifts in the geopolitical environment.

#5: Volume Confirms the Trend

Volume-based indicators that can help you gauge buying/selling pressure and accumulation and distribution.

FIGURE 5. CHART OF THE BIG THREE US MARKET INDEXES WITH VOLUME INDICATORS. Volume-based indicators like Chaikin Money Flow and Accumulation/Distribution Line give valuable insight into buying/selling pressure and accumulation/distribution.

The Chaikin Money Flow (CMF) is positive in all three indexes, indicating more buying pressure than selling pressure. While the CMF readings are not as strong as they were in January and February, you might expect the levels to rise if the overall market begins to turn. The Accumulation/Distribution Line (ADL) is also exhibiting a steady increase, more so in the $SPX and $COMPQ than in the $INDU, which appears to be flattening.

In summary, volume is confirming the turnaround, but tentatively and cautiously.

#6: A Trend Remains in Effect Until a Clear Reversal Occurs

This is where a close examination of the underlying secondary trend structure is critical. You may have different ways to gauge when a market is trending up or down, or not trending at all.

I usually begin (and sometimes end) by looking at the relationship between price and sequential swing highs and swing lows. For example, take a look at this daily chart of $INDU.

FIGURE 6. DAILY CHART OF THE DOW JONES INDUSTRIAL AVERAGE INDEX. The index has reversed to the upside, but it’s important to monitor these key levels to determine whether the current reversal will develop into an uptrend.

Note that I’m using the ZigZag line to market the key swing highs and lows on the chart.

$INDU’s downtrend reversed when it broke above 40,750, the two swing high points that marked a key resistance level. Now, $INDU is aiming to challenge the next swing highs (resistance levels), which are situated in the range between 42,500 and 43,000. For the reversal to develop into an uptrend, $INDU must stay above the most recent swing low of 37,750 and eventually break above 43,000.

In short, and according to Dow theory, the downtrend has been broken, but the uptrend has not yet been confirmed by the price action.

At the Close

Dow Theory may be over a century old, but its principles remain surprisingly resilient, especially when viewed through the lens of today’s volatile, information-saturated markets. Right now, we’re seeing a bullish reversal in the markets. However, this reversal is happening on the secondary trend level, which is extremely vulnerable to sudden and severe shifts in today’s volatile geopolitical environment. In short, the trend may be turning, but as Charles Dow himself might suggest, don’t call it an uptrend until it proves itself.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your personal and financial situation, or without consulting a financial professional.

SPY and QQQ crossed above their 200-day SMAs with big moves on Monday, and held above these long-term moving averages the entire week. The V-Reversal was extraordinary and SPY seems short-term overbought, but this cross above the 200 day SMA cross is a bullish signal for the most important market benchmark. Despite a bullish signal, long-term moving averages are trend-following indicators and it is important to set realistic expectations.

***** This is an abbreviated version of a research report covering the 200-day SMA, performance improvements and a twist for QQQ. Recent reports at TrendInvestorPro covered the V-Reversal, the Bottoming Process and an Exit Strategy for the Zweight Breadth Thrust. Click here to take a trial and get immediate access. *****

The chart below shows SPY with the 200-day SMA (blue). This 200-day cross captured two big uptrends since 2020 and foreshadowed the bear market in 2022. Even though these three signals look great, there were plenty of whipsaws along the way. SPY crossed the 200-day SMA 141 times since 2005, which averages 7 crosses per year. Averages can be deceptive because some years have more crosses than others. SPY did not cross its 200-day in 2021 and 2024, but there were 22 crosses between January 2022 and March 2023.

The indicator window shows Percent above MA (1,200,1) to better highlight these crosses. It turns positive (green) with a bullish cross and negative (red) with a bearish cross. The values are the percentage difference between the close and the 200-day SMA.  

There is no such thing as a perfect indicator. Trend-following indicators are great at catching big trends, but they are also prone to whipsaws (failed signals). Whipsaws are simply the price of admission for a trend-following strategy. We must take the good (big trends) with the bad (whipsaws). As the chart above confirms, trend-following works over time because one good trend pays for the whipsaws.

Chartists can improve 200-day SMA signals with a little smoothing. For example, use a 5-day SMA instead of the close. Since 2005, the 5-day SMA crossed its 200-day SMA 55 times, which averages out to 3 per year. Fewer signals means fewer whipsaws. Also note that this smoothing generated higher returns and lower drawdowns.

The chart above shows the SPY with Percent above MA (5,200,1). This indicator captures the percentage difference between the 5 and 200 day SMAs. Instead of 22 crosses between January 2022 and March 2023, the 5-day SMA crossed the 200-day SMA just 8 times. This indicator is part of the TIP Indicator Edge Plugin for StockCharts ACP.

We can reduce whipsaws even more by adding a signal filter. This next section will cover signal filters and performance metrics for SPY. We then show how other ETFs perform and add little twist to improve performance for QQQ signals. This section continues for subscribers to TrendInvestorPro. Click here to take a trial and get immediate access. 

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If you didn’t check in on the stock market the last couple of weeks, you might be surprised to see how strong they were this week.

The three major stock indexes — S&P 500 ($SPX), Nasdaq Composite ($COMPQ), and Dow Jones Industrial Average ($INDU) — broke through their 200-day simple moving averages (SMAs) and are about 3–5% away from their all-time highs.

The Dow took a bit of a hit early this week, mostly because shares of UnitedHealth Group, Inc. (UNH) took a tumble. By Friday, though, the Dow recovered.

A Clearer Outlook Ahead

After dealing with an uncertain market, we’re finally seeing some encouraging signs. Large-cap growth stocks are trying to regain the lead, market breadth is improving (i.e. broader participation), and the Cboe Volatility Index ($VIX) has cooled off significantly.

Another helpful signal — the Bullish Percent Index (BPI) — is above 50% for the major indexes. This suggests that bulls are in control. In the 11 S&P sectors, there’s been a switcheroo. Consumer Staples and Utilities now have a BPI below 50%.

FIGURE 1: BULLISH PERCENT INDEXES FOR THE S&P SECTORS. Consumer Staples and Utilities are below 50%.

Want to dig into this yourself? You can view the full picture on the Market Summary page at StockCharts.com.

Image source: StockCharts.com. For educational purposes.

AI Stocks Back in the Spotlight

If you’ve been following the buzz around artificial intelligence (AI), you know it’s a hot area. This week proved that AI stocks still had their mojo. A mix of headlines, from new global investments in AI to easing tech regulations, gave these stocks a boost.

The VanEck Vectors Semiconductor ETF (SMH) jumped over 10% this week. And NVIDIA Corp. (NVDA), one of the biggest names in AI, surged 16% for the week. The stock is now trading above its 200-day SMA and approaching its February high, which could act as a resistance level. This is the first time NVDA’s stock price broke above its 200-day SMA after breaking below it on February 27.

Other big names like Broadcom Inc. (AVGO) and Taiwan Semiconductor Mfg. (TSM) also saw solid gains.

FIGURE 2. SEMICONDUCTORS MARKETCARPET. Note that NVDA, AVGO, and TSM saw strong gains this week.Image source: StockCharts.com. For educational purposes.

Investors Turning Toward “Offense”

Investors are rotating into offensive sectors such as Technology and Consumer Discretionary and moving away from traditionally “safe” areas like Utilities and Staples. This is an indication that investors are feeling more confident.

News of lower tariffs between the U.S. and China has eased fears, which is reflected in the performance of bellwether industries such as Home Builders, Transportation, and Retail. The SPDR S&P Retail ETF (XRT) took a big hit on the possibility of high tariffs but bounced in early April. This week, the ETF gapped up and is now trading above its 200-day SMA (see chart below).

FIGURE 3. DAILY CHART OF SPDR S&P RETAIL ETF (XRT). After getting hammered, XRT is showing signs of recovery. The stock is now gaining some traction. It’s trading above its 200-day SMA, and momentum is strengthening.Chart source: StockCharts.com. For educational purposes.

XRT’s relative strength index (RSI) is rising above 70 and the percentage price oscillator (PPO) is well above zero. Both indicators suggest a rise in momentum.

A Word of Caution: Consumers Are Still Nervous

Amidst the excitement, we can’t ignore one concerning signal: consumer sentiment.. The latest reading of the University of Michigan’s consumer sentiment index came in at 50.8, which is pretty close to the June 2022 reading of 50, when inflation was over 9%.

Results showed that consumers are worried about inflation — the expectation was a high 7.3%. Walmart (WMT) executives even mentioned during its recent earnings call that higher tariffs might lead to price increases. This is something to keep in the back of your mind because, when consumer sentiment weakens, it could ripple through the stock market.

Inflation expectations are starting to climb higher. The probability of the interest rate cuts has dropped, according to the CME FedWatch tool. Cuts in June and July are off the table now. The chart below is worth adding to one of your ChartLists.

FIGURE 4: INFLATION EXPECTATIONS ARE CREEPING HIGHER. It’s worth monitoring this chart because higher prices lead to less consumer spending and declining consumer confidence. This can be a headwind for equity markets.Chart source: StockCharts.com. For educational purposes.

The Bottom Line

When the stock market reverses course as quickly as it did this week, it doesn’t hurt to be skeptical. Before getting caught up in the euphoria, keep an eye on things like offensive vs defensive sector rotation, market breadth indicators, and key fundamentals such as inflation expectations. If inflation heats up again, the Fed will be reluctant to cut interest rates. This is the kind of thing that can put the brakes on a market rally.


End-of-Week Wrap-Up

  • Dow Jones Industrial Average: 42,654 (+ 3.41%)
  • S&P 500: 5,958.38 (+ 5.27%)
  • Nasdaq Composite: 19,211 (+7.15%)
  • $VIX: 17.24 (-21.28%)
  • Best performing sector for the week: Technology
  • Worst performing sector for the week: Health Care
  • Top 5 Large Cap SCTR stocks: Palantir Technologies, Inc. (PLTR); Nebius Group NV (NBIS); NRG Energy, Inc. (NRG); Robinhood Markets Inc. (HOOD); Super Micro Computer, Inc. (SMCI)

On the Radar Next Week

  • May PMI Flash
  • April Existing Home Sales
  • Earnings from Home Depot (HD), Lowe’s Companies (LOW), Toll Brothers, Inc. (TOL), XPeng Inc. (XPEV), Snowflake (SNOW), Baidu Inc. (BIDU), and several others.
  • Fed speeches from Bostic, Jefferson, Williams, and others.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

We’ve all heard the classic market maxim, “Sell in May and go away.”  For many investors, that’s the introduction to market seasonality that suggests a six month period where it’s just best to avoid stocks altogether.

Through my own experience, complemented with interviews with seasonality experts like ”  We’ll dig deeper into the history of “Sell in May,” analyze summer trends in recent years, and focus on signs to follow in the weeks and months ahead!  Sign up HERE for this free event!


It turns out that the reason why “sell in May” has often worked out is less about May being super weak, but more about how major lows have usually come in the fall months.  Since the COVID low in early 2020, we’ve experienced major lows in September or October every year except for 2024.

Spring and Early Summer Have Been Crazy Strong

When we focus on the last five years, we can see that the May-June-July period has been consistently strong.  In fact, May and July have seen bullish trends every year since 2019.  So while investors often talk about the “summer doldrums” and weakness into the hot summer months, the recent evidence would suggest otherwise.

The weakest months since the COVID low have actually been January, February, September, and October.  So again, it’s been less about weakness in the spring, and much more about weaker price action into the traditional low in September or October.  Also note the strength in November, where the market is almost always rallying off a major low and setting up for a positive finish to the calendar year!

Will 2025 Follow the Normal Seasonal Pattern?

As I mentioned earlier, I like to think of seasonal patterns as tendencies.  There is no guarantee that July will be strong, and there is no way I can tell you for sure that the market will make yet another major low in September.  Seasonality tells you the general bias to the markets, but mindful investors know the most important evidence is price itself.

Given the extreme rally off the early April low, we’ve seen a rapid rotation from bearish sentiment to more bullish outlooks as investors have started to believe in the new uptrend phase.  This week’s price gap higher for the S&P 500 could provide a perfect support range to monitor in the coming weeks and months.

If the S&P 500 is able to hold 5750, and remain above the support range set from the gap earlier this month, then perhaps the equity markets will follow the same pattern as recent years and remain strong into August.

If, however, the S&P 500 is unable to hold this key support range, and we also confirm that breakdown with weaker momentum readings and deteriorating breadth conditions, then the S&P 500 may be charting a new course through what has become a strong period in the calendar year.

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

marketmisbehavior.com

https://www.youtube.com/c/MarketMisbehavior

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.